On Monday, the Ninth Circuit handed gig workers a win, invalidating a ruling that a Grubhub driver should be classified as an independent contractor. The Court ruled that the lower court must look at the case again because the California Supreme Court has now held that the Dynamex “ABC” test applies retroactively. Under the ABC test, a worker is presumed to be an employee unless the employer can prove that the worker: (A) was not subject to the employer’s control, (B) provided services outside of the employer’s usual course of business, and (C) did not have their own independent business.
The three-judge appellate panel remanded to the district court to apply the ABC test to plaintiff Raef Lawson’s minimum wage and overtime claims. The panel rejected Grubhub’s argument that Prop 22, which was passed last year and allows some app-based drivers to be classified as independent contractors, applies retroactively. “We conclude without difficulty that Proposition 22 does not apply retroactively,” the Court wrote. The panel also rejected Grubhub’s argument that Prop 22 somehow “abates” or nullifies wage claims that accrued before Prop 22 went into effect. This is the first time a court has ruled that Prop 22 is not retroactive, and that Prop 22 does not abate previously-existing wage claims.
On remand, the lower court must determine whether Lawson is an employee under the ABC test, and also whether Lawson is exempt from the ABC test under one of the exemptions provided for by AB5, the landmark legislation that codified the ABC test after Dynamex was decided. The AB5 exemptions are retroactive. We will be following this case closely to see if the lower court will find that Lawson is an employee or an independent contractor.
If you believe you have been misclassified as an independent contractor, contact Teukolsky Law today for a free consultation.
As Prop 22 goes into effect in California, workers and unions are already fighting back against the measure, which was largely propped up by tech giants’ $200 million “Yes on 22” campaign.
Several drivers and SEIU filed a petition in California Supreme Court on January 12, 2021 seeking to overturn the new ballot measure, which aims to permanently classify gig workers as independent contractors instead of employees. The drivers and union allege that Prop 22 violates California’s constitution and are asking the Court to invalidate the new law, arguing that Prop 22 makes it too difficult for state legislators to implement workers’ compensation. On February 3, the Court declined to hear the suit 5-2. However, the Court said the case could be refiled in a lower court. On February 11, the drivers and union filed a similar suit in Alameda County Superior Court.
Prop 22’s destructive effects are being felt by workers statewide. The Knock LA reported last month that Vons, Pavilions, and other stores owned by Albertsons Companies in California plan to fire grocery delivery drivers later this month and will shift to a third-party delivery service that uses independent contractors. Drivers working for Albertsons Companies are currently classified as employees; the company’s Bay Area drivers are unionized and will not be affected by the change, but delivery drivers in Southern California not protected by a union lack the power to fight back against this move by the grocery stores.
If you believe you have been misclassified as an independent contractor instead of an employee, contact Teukolsky Law today for a free consultation.
Lauren Teukolsky is the founder and owner of Teukolsky Law, A Professional Corporation.